Small businesses aren’t just big businesses with less cash and fewer employees. Small businesses tend to run very differently than big businesses, and applying the rules and methods that big businesses use can cause a small business to flounder and fail.
That doesn’t mean that small businesses operate in a vacuum without rules, however. These small business rules will help you find the right way to manage your company.
1. Bring in more money than you spend
This one should seem obvious, but with the amount of financing that tends to get thrown at small businesses, it is sometimes difficult to remember that loans aren’t free money. Loans need to be paid back, and often need to be paid back more quickly than seems possible.
Whenever a business borrows money, it should have a clear and viable understanding of how and when that money will be paid back. If it can’t do that, it shouldn’t borrow the money.
2. Make plans but stay flexible
The old adage says that no plan survives first contact with the enemy; in business, this is certainly true. The “enemy” can be either the customer or the competition, but either way, plans very rarely work out the way businesses expect.
Some companies don’t bother to make plans and just float through their workday making the choices that seem right at the time. This is as bad as having a rigid plan that is enforced no matter what responses it is getting. Find the middle ground; have a plan, but be ready to be flexible if a better choice arises.
3. Never stop seeking improvement
When a business is on top, it can be tempting to just ride the wave and be happy there. If a company is simply looking to make a quick profit and get out of the business, then that’s fine. If a company is building long term success, however, it is necessary to continue to seek improvement, even when it feels like everything is going perfectly.
4. Hire the best
Companies fail and succeed by the quality of their employees. If a business can’t afford to make the best hires, they are going to struggle over time. Companies should always find the best people possible, from freelancers to vendors to employees.
With freelancers, subcontractors, and vendors, there is the option to move on to a new partnership once a business expands to a certain level. This can certainly work, but depending on the circumstances can leave bad feelings in its wake. With employees, this is much less clear cut, and can be an even worse conversation.
Businesses should work to create the right partnerships at the right times; if they do need to sever those ties, it’s important to do that with clear communication and direction. Consider investing in personalized gifts to keep your employees motivated and appreciated, as this can significantly boost morale and productivity.
5. Don’t wait for enough
Especially when someone is starting a new business, there’s a tendency to wait until they have enough. They need enough money, enough time, enough research, enough contacts. While diving into a business without being adequately prepared is a terrible idea, “enough” can also be used as a delaying tactic. This is where a solid business plan can be incredibly valuable. A business plan can help to define what “enough” is so that entrepreneurs know when they’re ready to get started.
One way to understand if enough is enough is to look at what would happen if enough suddenly turned out to be too little. If a business ran through startup capital more quickly than expected (as is so often the case), what would the next step be? Is there a plan for getting a loan, finding a grant, reaching out to family or dipping into personal reserves? Knowing the next step can help find the space between not having enough and delaying through fear.
6. Know what you can do – and what you can’t
No entrepreneur can do everything. As a small business expands, it often becomes apparent that the company would thrive with the help of an accountant, a marketing expert, or an IT specialist. Hiring these people can be too expensive, however. Businesses can now contract out these services so that they can expand without taking on new employees and creating new departments.
7. Seek out niche
The key to growing a small business in the twenty-first century is to look for small, underserved communities of customers, and meet their needs as precisely as possible. The global connections of the Internet mean that doing this is easier than it has ever been.
Through targeted ads and promotion, high-quality marketing based on well-researched keywords, and excellent customer service tailored to the community in question, small businesses can become very successful in a niche market.
